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mestny [16]
2 years ago
15

A company has revenues of $100 during Year 1. Each year their profit is 20% of revenue. Revenue is growing 15% per year. How muc

h total profit (rounded to the nearest penny) will the company earn during Years 1-10
Business
1 answer:
oksian1 [2.3K]2 years ago
5 0

Answer:

$406.07

Explanation:

Revenue for year 1 = $100

Profit = 20%

Growth rate of revenue, = 15% per year = 0.15

Now,

year 1 is the base year thus, take it as n = 0

Revenue for the year = $100 × ( 1 + r )ⁿ

Profit = 20% of [$100 × ( 1 + r )ⁿ]

Year       n              Revenue               Profit

  1           0            $100( 1 + r )⁰            $20

  2          1            $100( 1 + r )¹             $23

  3          2            $100( 1 + r )²            $26.45

  4          3            $100( 1 + r )³            $30.4175

  5          4            $100( 1 + r )⁴            $34.98

  6          5            $100( 1 + r )⁵            $40.227

  7          6            $100( 1 + r )⁶            $46.261

  8          7            $100( 1 + r )⁷            $53.2004

  9          8            $100( 1 + r )⁸            $61.1804

  10         9            $100( 1 + r )⁹            $70.357

   Hence,

Total profit for the year 1 - 10 = $406.07

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Answer:

d) The value of equity is $0

Explanation:

Bank loans are classified as performing and nonperforming loans. Nonperforming loans that stay for over a long period (usually 12 months) are considered to be a loss.

When a bank makes a loss on loans (loan goes bad due to nonrepayment) they make provisions and debit the business equity for the loss.

The given loan amount is $800 and the bank had to provision 5% of that amount.

Loss from loan= 800* 0.05= $40

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3 years ago
Saar Associates sells two licenses to Kim & Company on September 1, 2021. First, in exchange for $100,000, Saar provides Kim
Vladimir79 [104]

$110,000 revenue will Saar recognise in 2021 under this arrangement

Solution:

First, in exchange for $100,000

Second, in exchange for $90,000

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3 years ago
On May 7, Bergan Company purchased on account 10,000 units of raw materials at $8 per unit. During May, raw materials were requi
katrin [286]

Answer:

Dr Purchases/ Raw Material Inventory .......................80,000

Cr   Bank/Account Payable....................................................80,000

Dr Work in Process ................................................................67,400

Cr Raw Material Inventory............................................................67,400

Explanation:

FOR PURCHASE OF MATERIAL

Dr Purchases/ Raw Material Inventory .......................80,000

Cr   Bank/Account Payable....................................................80,000

Being purchase of 10,000 units of raw materials at  $8 per unit

FOR MATERIAL FOR PRODUCTION

Dr Work in Process ................................................................67,400

Cr Raw Material Inventory............................................................67,400

Being materials used in production: 7,500 units at $8 per unit for job 200 and 1,480 units at $5 per unit for job 305

In relation to 'purchase of material' we debit the raw material inventory account because material is increasing and is an asset account; and we credit Bank if the materials have been paid for OR 'accounts payable', if the material has not yet been paid for.

In relation to 'requisition of material for production' we debit the raw material inventory account because material is decreasing and is an asset account; and we credit 'work in process' to assign the cost of materials to the ongoing jobs respectively.

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3 years ago
AB Builders, Inc., has 22-year bonds outstanding with a par value of $2,000 and a quoted price of 106.657. The bonds pay interes
Aloiza [94]

Answer:

7.32%

Explanation:

<em>The price of a bond is the present of its interest payment and the present value of redemption value (RV</em>

Present value of the Redemption Value (RV) =

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=2000× (1.0337)^(-2×22)

= 465.233

Present Value of the coupon payment =Price of bond - PV of RV

                          = (106.657% × 2000) - 465.233

                         =    $1667.90

PV of coupon payment= A × (1-(1+r)^(-2×n)

A- semiannual coupon payment, r -yield

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    1,667.90   = A × 22.7710

A = 1,667.90/22.7710

A= 73.246

Annual coupon payment = 2× 73.246=  146.493

Annual coupon rate = coupon payment/ face value

                                = (146.493/2,000 )× 100

                                = 7.32%

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3 years ago
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Taya2010 [7]

Answer:

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6 0
3 years ago
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